Shanghai auto show joins global leaders

By Mark Venables

Published Tuesday, May 17, 2011

The 2011 Shanghai Motor show demonstrated how seriously European and US automotive manufacturers are taking the Chinese market.

The times are certainly changing. Traditionally the Shanghai Motor Show has been the province of local cars with launches from Western manufacturers very much playing second fiddle. But this year’s show saw a host of high-profile concept car launches that put the event on an equal footing with its previously more illustrious cousins at Detroit, Geneva, Frankfurt and Paris.But that should really come as no surprise given the growing importance of the Chinese market. Volkswagen Group sells more cars in China than in Germany, for BMW it is a rapidly expanding market, and even Renault, which does not yet sell significant numbers of cars in China, had a heavy presence at the show.

With China’s current position as the world’s biggest automaker and also the fastest-growing, the event’s relevance to European and global automakers is clear.

China is throwing up a whole new world of car companies with names such as Brilliance, Chery, Changan, SAIC and Great Wall. Add to these the fact that companies such as Volvo and MG are now owned by the Chinese and you can almost see the momentum growing.

Most of the world’s big carmakers are manufacturing in the country with local joint venture partners – the partners are necessary under Chinese law – and it may not be long before we see hybrids emerging. Not the petrol-electric hybrids, but new brands developed jointly by Western and Chinese companies to meet the preferences of that market.

At the Shanghai show Chongqing Changan Automobile, which has a three-way partnership with Ford and Mazda, said that the joint venture is considering rolling out its own brand. Under the partnership Changan currently makes and sells the Ford Focus, Fiesta and Mondeo in China. It also sells the Mazda2 and Mazda3.

General Motors also has big plans, looking to double its sales in China to around five million units by 2015 from 2.35 million last year. GM China chief Kevin Wale, a former Vauxhall managing director, said GM planned to introduce 60 new and upgraded models in China over the next five years, including 12 Buicks and 15 Chevrolets.

Other companies woke up later to the importance of this market. Jaguar Land Rover only launched its own sales and distribution network in China in the middle of last year, having sold through local distributors since 2003. JLR is talking to a number of Chinese companies about a possible manufacturing joint venture, said CEO Dr Ralf Speth. The company had a “once in a century” opportunity to establish itself globally, he added, and he was determined to seize it.